The JSDF are calling the Empire insurgents? When did this occur? before or after the Japanese government proclaimed that the Gate and the Special Region are Japanese Soil? It was never explained whenever the date for the Japanese Proclamation was told before or after they sent JSDF troops within the Gate. There's two Possibles to this:
1. If this was before, then it doesn't make any sense whatsoever as the Empire's Soldiers look nothing like modern Insurgents with their Roman looks, Demi-Human slaves, and Wyverns. neither of the latter two does Insurgents have, and why would they dress up as roman soldiers? This makes the police/army look like complete utter morons who don't know what Insurgents even are. "Hmmm, these Guys who look like Roman Soldiers who are using spears and shields to attack civilians, They must be Insurgents!"
2. If it was after, then this Chapter proves to us that the Japanese/Yani are admitting that the Empire are just a Military Occupation Force to them and not a nation who control their own land. The Japanese just wants their land and resources, regardless what the Natives think of. Their Special Region forces are to serve as a pacification force so the Japanese can have avoid Humanitarian issues and take their resources with the natives not minding they do so as they don't see the value in things like oil. "Hehe, stupid primitives. It's only a matter of time until we can overthrow the shackles of the superpower nations and become kings of both worlds!"-The Japanese Government/Military/Takumi Yanai
To be honest, Scenario 2 is more likely, as an entire week has passed before those Empire Generals were captured. It would've been impossible for them to entrench themselves in a modern city for a couple days, let alone a week. By this time the incident would've been worldwide and the Japanese Government would've already made their proclamation.
It's a lose-lose situation for Yani, He keeps shooting himself in the foot with these chapters LMAO!